The Federal Reserve Bank of New York is planning to run a proof-of-concept pilot with several large banks for a central bank digital currency (CBDC).
The New York Fed said in a press release that the New York Innovation Center (NYIC) will launch a 12-week pilot.
The program will test the “technical feasibility, legal viability, and business applicability” of distributed ledger technology, as well as simulate tokens and explore regulatory frameworks.
BNY Mellon, Citigroup, HSBC, Mastercard, PNC Financial Group, TD Bank, Truist Financial, U.S. Bancorp and Wells Fargo will participate in the pilot by issuing tokens and settling transactions through simulated central bank reserves.
Swift is supporting interoperability across the international financial ecosystem, the New York Fed said.
“The NYIC looks forward to collaborating with members of the banking community to advance research on asset tokenization and the future of financial market infrastructures in the U.S. as money and banking evolve,” NYIC Director Per von Zelowitz said in the release.
The New York Fed said the project could “potentially be extended to multi-currency operations and regulated stablecoins.”